Having used a variety of cloud servers (Slicehost before the RS acquisition as well as after) I would agree that the cloud offering from RS has a long way to go, both in terms of features and performance. You get way better performance from Linode (for less money last I checked) and tons more features from EC2 (as outlined in the article).
To me, the only good reasons to go with RS's cloud offerings are if you've already got dedicated machines with them (and want simplified billing, or integration via their hybrid hosting), or are planning to integrate heavily with their other cloud services (e.g. free network to cloudfiles)
You also get significantly worse security and transparency from Linode versus EC2.
* No multi-factor authentication for admin screens.
* No ability to pass environment variables from admin screens to instances (useful for keeping logins off instances).
* Customer support has ability to gain root access to machines.
* Little to no information provided about security incidents.
* Generally poor transparency for all incidents e.g. outages, security.
* Recent history of major security incidents.
* Inability to get all information in a single RSS feed.
To me, the only good reasons to go with RS's cloud offerings are if you've already got dedicated machines with them (and want simplified billing, or integration via their hybrid hosting), or are planning to integrate heavily with their other cloud services (e.g. free network to cloudfiles)